British Pound to Euro Forecast: Why This Bank Sets Target of 1.1360

Modified: Wednesday, 15 October 2025 09:30 BST - Written by Tim Boyer

STORY LINK British Pound to Euro Forecast: Why This Bank Sets Target of 1.1360

Pound Sterling Slides Against Euro as Unemployment Hits 4-Year High

The British Pound Sterling weakened sharply against the Euro on Tuesday as rising joblessness and slowing wage growth reignited speculation of a Bank of England rate cut.

The Pound to Euro exchange rate (GBP/EUR) slipped to 1.1470, with ING targeting 1.1360 by year-end while Barclays argues markets are underestimating UK resilience.

GBP/EUR Forecasts: Back Below 1.15

IG chief market analyst Chris Beauchamp commented; “This morning’s data provides little in the way of good news for the struggling UK economy, and puts more pressure on the Bank of England and the government to act to provide more support.

ING has a year-end GBP/EUR forecast of 1.1360

Barclays, however, is more positive on the Pound outlook; "fundamentals are more solid than markets appreciate, and short positions are crowded."


The UK unemployment rate increased to 4.8% in the three months to August compared with expectations of an unchanged rate of 4.7% and the highest rate since July 2021.

According to the data, there was a 10,000 decline in September payrolls following a revised 10,000 increase the previous month and compared with the flash reading of an 8,000 decline.

Vacancies declined for the 39th successive month, although at a slower pace.

ONS director of economic statistics Liz McKeown commented; “After a long period of weak hiring activity, there are signs that the falls we have seen in both payroll numbers and vacancies are now levelling off.”

Headline average earnings increase 5.0% in the year to August from a revised 4.8% previously and above expectations of 4.7%, but underlying earnings edged lower to 4.7% from 4.8%.

Within the wages data, private-sector growth slowed to a 4-year low.

ING commented; “UK private sector wage growth is falling and is likely to continue on this path for the rest of this year. A December rate cut is possible, though for now we’re forecasting February for the next move.”

It added; “We expect three cuts in 2026, which is more than markets are currently pricing.”

Elsewhere, the British Retail Consortium (BRC) reported that like-for-like retail sales growth of 2.0% in the year to September from 2.9% previously and below consensus forecasts of 2.5%.

BRC chief executive Helen Dickinson commented; “Rising inflation and a potentially taxing budget are weighing on the minds of many households planning their Christmas spending.”

Barclays reported that card spending declined 0.7% in the year to September after a 0.5% increase the previous month.

Markets will continue to monitor political developments in France with Prime Minister Lecornu due to hold a cabinet meeting and present proposals for the 2026 budget.

Commentary from opposition parties following the proposals will be watched very closely.

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TAGS: Currency Predictions Pound Euro Forecasts